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Firm-Sponsored General Training

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  • Felipe Balmaceda

    (Centro de Economia Aplicada, Universidad de Chile)

Abstract

This article analyzes firm and worker's incentives to invest in general and specific training when these are separable in the production technology and wages are determined by the outside-option principle. It is shown that firms pay for general training, while workers receive the full return on it, and firms and workers share both the costs and benefits of specific training. The case of delayed general training is also studied. When general training is delayed, it is shown that the strategic complementarity between specific and general training increases the worker's incentives to invest in specific training.

Suggested Citation

  • Felipe Balmaceda, 2005. "Firm-Sponsored General Training," Journal of Labor Economics, University of Chicago Press, vol. 23(1), pages 115-134, January.
  • Handle: RePEc:ucp:jlabec:v:23:y:2005:i:1:p:115-134
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    References listed on IDEAS

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    Cited by:

    1. Nicola Meccheri, 2009. "Large Breach Penalties and Managers´ Incentives to Invest Inside or Outside Firms," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 165(4), pages 598-621, December.
    2. Neumark, David & Johnson, Hans & Mejia, Marisol Cuellar, 2013. "Future skill shortages in the U.S. economy?," Economics of Education Review, Elsevier, vol. 32(C), pages 151-167.
    3. Bilanakos, Christos, 2013. "Career concerns and firm – sponsored general training," Research in Economics, Elsevier, vol. 67(2), pages 117-132.
    4. Felipe Balmaceda, 2008. "Firm-Provided Training and Labor Market Policies," Documentos de Trabajo 252, Centro de Economía Aplicada, Universidad de Chile.
    5. Felipe Balmaceda, 2006. "Task-Specific Training and Job Design," Documentos de Trabajo 223, Centro de Economía Aplicada, Universidad de Chile.
    6. Pontus Rendahl, 2013. "Equilibrium Contracts and Firm-sponsored Training," Cambridge Working Papers in Economics 1336, Faculty of Economics, University of Cambridge.
    7. Tang, Heiwai, 2012. "Labor market institutions, firm-specific skills, and trade patterns," Journal of International Economics, Elsevier, vol. 87(2), pages 337-351.
    8. Prasad, Suraj & Tran, Hien, 2013. "Work practices, incentives for skills, and training," Labour Economics, Elsevier, vol. 23(C), pages 66-76.
    9. Hanming Fang & Alessandro Gavazza, 2007. "Dynamic Inefficiencies in Employment-Based Health Insurance System Theory and Evidence," NBER Working Papers 13371, National Bureau of Economic Research, Inc.
    10. Ayşe Mumcu, 2010. "Strategic Withholding Of Firm-Specific Skills In Wage Bargaining," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(2), pages 187-211, May.
    11. Rasmus Lentz & Nicolas Roys, 2015. "Training and Search On the Job," NBER Working Papers 21702, National Bureau of Economic Research, Inc.

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